BRASILIA, March 26 (Reuters) - Brazil will shut down one of its two nuclear power reactors for refueling and maintenance, depriving the nation of enough electricity to light up a city of about 1 million at a crucial time when it faces the prospect of power rationing due to drought.

Eletronuclear, a unit of state-controlled Eletrobras , Brazil's largest power utility holding company, announced that the 640-megawatt Angra 1 nuclear plant will shut down for 36 days of scheduled work at midnight local time (0300 GMT) on Saturday.

Brazil is fighting against time to avoid crippling power blackouts and electricity rationing because prolonged drought has lowered the reservoirs of its hydroelectric dams to critical levels.

The Angra 1 shut-down will force the country to resort to more expensive thermal power generation to make up for the temporary loss.

Eletronuclear said the complex maintenance work involves 1,400 people and was planned a year in advance. It said grid operator ONS will need to "maneuver" to guarantee electricity supplies.

Hydro reservoirs, which generate two-thirds of Brazil's power, are at near-record lows. To keep the lights on and factories open, all of the country's main thermal power plants are running full throttle.

Brazil risks major embarrassment if it has to ration power when an estimated 600,000 foreign fans begin to arrive in June for the 2014 soccer World Cup.

Power shortages and inflation fueled by more costly electricity generation could undermine President Dilma Rousseff's popularity as she prepares to seek a second term in October general elections. (Reporting by Anthony Boadle; Editing by Lisa Shumaker)